Brands that want to build a loyal consumer base have been encouraged to look beyond offering discounts.
According to Air Miles founder Sir Keith Mills, there is “clearly a subset of any consumer market driven primarily by price.”
However, he said this is not necessarily the majority, which means many other people could be influenced in other ways.
For instance, he pointed out that the majority simply want “good value” and said “that can be determined in a number of different ways.”
“Look at the grocery market, we have seen incredible growth in the price sensitive sector with Aldi and Lidl, which have grown really well in the last few years,” Sir Keith commented.
“But then so has Waitrose and that’s a completely different offer.”
Sir Keith believes using data effectively is the key to achieving success with whatever approach a brand takes.
Otherwise, he stated that simply offering broad financial discounts to every customer would be comparable to cracking a nut with a sledgehammer.
Sir Keith said retailers in particular should be aiming to create customer propositions on a one-to-one basis, much like Amazon does.
“Offline retailers need to be able to do what Amazon do online with the normal shopping experience,” he said.
“To do that, they need data.”
Sir Keith stated that companies will see their best returns if data and insight can help them tailor their proposition on an individual basis.
“In the future, the one-size-fits-all model won’t provide companies with the same sorts of returns,” he observed. “You might as well do mass marketing.”
Sir Keith went on to state that consumers are more savvy than ever before and able to easily switch to a competitor.
This, he stressed, means brands must stay relevant in order to earn people’s loyalty.
However, he noted that how they use data is only one key factor in achieving this goal, as they must also deliver a high-quality product or service, as well as offer a good customer experience.
“Fundamentally, if you have a poor product or a poor service you will fail because the consumer is very discerning and if they have a bad experience in a store or they buy a bad product then there are plenty of alternatives for them to choose from,” Sir Keith said.
Staff training and recruitment are therefore other key factors behind customer loyalty, he insisted.
Why brands need to approach loyalty like Amazon., Marketing Week